Google has recently acquired 30% stake in the seed-stage fund Ventureast TeNet Fund II. The fund is run by the Tenet group of IIT-Madras and Ventureast Fund Advisors. Tenet is “The Telecommunication and Computer Networking Group”, and is focussed on incubating R&D companies. There have been successful companies launched from Tenet like Midas Communication, Banyan Networks, NexGe Technologies etc. Along with Ventureast, the seed fund now aims at funding companies at the seed stage.
There have been VC funding available to the newer companies, but most of them were in the second of third stage. If one starts a company from scratch, and is looking to a support capital at the seed-stage, the options, though existent, were really few.
The things are changing now, though. This is Google’s third investment in seed funding in India after Seed Fund and Erasmic Fund. Well, fourth, may be, because Google is also onboard Angel Network – a group consisting primarily of successful entrepreneurs who invest in early stage companies. Things seem to become more favourable for aspiring entrepreneurs.
India badly needs an eco-system to nurture entrepreneurship. Seed funding is one major part of that. Organizations like NirmaLabs, Band of Angels, and now Ventureast are doing some really good work in this direction.
Another important organization that is entering the seed fund is the Government of India. Business Standard reports that the government is planning to launch a seed fund for Indian startup companies. A nice and logical step into a progressive future, after de-licensing in the 90’s. Initiatives like this need more thrust and focus. Although bureaucracy can squander such efforts, the good news is the participation of the private parties like The Indus Entrepreneurs (TiE) and the Indian School of Business (ISB). With organizations like this, it is sure to bring some professionalism to the act. The ideas will be funded at the proof-of-concept stage, which is really good news, because most of the funding starts only after a working prototype is available with some test results. The fund’s corpus is Rs. 75 crores, which, I feel is low by a factor of ten. But I am sure once started, this will increase. The Department of Science and Technology (DST), which is the department responsible for the corpus, seems to be serious for encouraging entrepreneurship in the country. Earlier, the DST has earlier invested in partnered with NirmaLabs too.
Government entering the seed fund stage is actually a very good news. If executed well, this can greatly help nurture and encourage innovation at the grassroot level, where many have the ability to create highly usable products that can find instant applications. Hope this act puts India among the world’s favourite places to be in for entrepreneurship.
